India, Iran sign pact on developing Chabahar port

Notwithstanding US objections, India on Wednesday went ahead with the signing of an agreement with Iran for the development of the strategically important Chabahar port which will give India sea-land access route to Afghanistan bypassing Pakistan.

The pact was signed after comprehensive talks between visiting Road Transport and Highways Minister Nitin Gadkari with the Iranian leadership in Tehran.

"The MoU (Memorandum of Understanding) was signed after the talks between the two sides," a source said.

Iranian President Hassan Rouhani, in his meeting with Gadkari, said, "Resumption of Iran-India cooperation in the southeastern Iranian port city of Chabahar would lead to a new chapter in relations of two countries."

Chabahar port is located in Sistan-Balochistan Province on Iran's southeastern coast and is of great strategic utility for India which will get sea-land access route to Afghanistan bypassing Pakistan.

The US has been asking India and other countries not to "rush" into doing business with Iran as Washington was yet to work out a deal with Tehran on the latter's contentious nuclear programme.

The port will be used to ship crude oil and urea, saving India transportation costs.

India intends to lease two berths at Chabahar for 10 years. The port will be developed through a special purpose vehicle (SPV) which will invest $85.21 million to convert the berths into a container terminal and a multi-purpose cargo terminal.

The Cabinet had given nod for constituting a Joint Venture or other appropriate Special Purpose Vehicle comprising the Jawaharlal Nehru Port Trust and the Kandla Port Trust.

Approval was also given for incurring annual revenue expenditure of $22.95 million to support operational activities of the Indian Joint Venture.

From Chahbahar port using the existing Iranian road network, a link up to Zaranj in Afghanistan and then using the Zaranj-Delaram road constructed by India in 2009, access to Afghanistan's Garland Highway can be made.

This would establish road access to four of the major cities of Afghanistan - Herat, Kandahar, Kabul and Mazar-e-Sharif.

The port would cut transport costs and freight time for India to Central Asia and the Gulf by about a third.

Last week, Prime Minister Narendra Modi had assured Afghan President Ashraf Ghani of India's commitment to building the port.

Earlier in 2003, the NDA government under Atal Bihari Vajpayee had signed an agreement with Iran for the Chabahar Port, but it could not be materialised.